Surging Unemployment In Travel Sector Likely to Make for Memorial Day Like No Other

May 20, 2020 by Dan McCue
Boardwalk. (Photo by Dan McCue)

WASHINGTON – Unemployment among the nation’s travel sector workers has reached 51% heading into the Memorial Day weekend, as Americans continue to refrain from resuming their normal lives in the face of the slowly easing coronavirus pandemic, according to data from the U.S. Travel Association.

In fact, in a statement, the association’s president and CEO Roger Dow offered a dire assessment — while the rest of the U.S. economy is mired in a recession, the travel industry “is already in a depression.”

He noted that in the past, the travel industry has proven its ability to lead a national economic recovery, citing the examples of the sector’s resilience after both the Sept. 11 2001, terrorist attacks and the global financial meltdown of 2008 and 2009.

“But to do that this time, travel-reliant businesses need to survive until a recovery can truly begin,” Dow said.

According to the association, businesses in the travel sector are struggling to retain employees because the structure of available relief from the federal government precludes many employers from taking advantage of it.

As a result, travel-related job losses due to the coronavirus represents 38% of all pandemic-related job losses through April — affecting nearly 10 million Americans.

From a historical perspective, the coronavirus has been far harder on the economy than the 2001 terrorist attacks, the association said.

In the year following the attacks on New York and Washington, D.C., travel spending declined $57 billion, representing a $133 billion economic loss.

This year, due to the coronavirus pandemic, travel spending is expected to decline $519 billion, representing $1.2 trillion in economic losses.

Before the pandemic, the travel industry contributed approximately $2.6 trillion to the U.S. economy, and supported an estimated 15.8 million jobs, according to the association.

Despite these statistics, there is reason to be encouraged about the future.

On Tuesday, White House coronavirus task force coordinator Dr. Deborah Birx told reporters the latest data on the pandemic shows declines in new cases of the virus, hospitalizations and deaths across all but a few areas of the United States.

Speaking at the White House, Birx said clinical, laboratory data and surveillance data from across the country shows that new hospitalizations have dropped by 50% in the last 30 days, and deaths continue to decrease week over week.

“All states have dropped under 20% test positive, and New York has gone from over 45% test positive just 30 days ago, to under 10% test positive,” Birx said, adding, “These types of declines are being seen across the board except in a few areas.”

The three exceptions are Washington, D.C., Chicago and Los Angeles.

Birx said the three cities are being closely monitored to “understand where precisely the new cases are coming from and how to prevent new infections.”

The most recent analysis by Tourism Economics, which is producing a week-by-week analysis and forecast of travel spending, found that national weekly travel spending rose to $2.9 billion last week, a reflection of states easing their coronavirus lockdown measures.

Also, in the week ending May 9, the travel industry portion of the economy witnessed its second-consecutive week of expansion since the start of the pandemic.

Despite that growth, the numbers are still 87% below last year’s levels, representing a $19 billion loss.

Four states have witnessed losses of over 90% in their travel-related revenue, and Hawaii and Washington, D.C. endured yet another week of declines exceeding 95%.

All, told, Tourism Economics found, declines in travel spending have caused a loss of $20.3 billion in federal, state and local tax revenue since March 1.

To help restore the industry and help right the economy, the U.S. Travel Association has developed a series of recommendations for lawmakers to consider, when, and if they do finally sit down to negotiate a new coronavirus relief bill.

These include, among other things, amending the original CARES Act bill to enable destination marketing organizations to receive Small Business Administration Paycheck Protection Program loans, increase maximum loan amounts and flexibility, and extend the covered period through 2020.

They’d also like to see Congress incentivize a safe restart of the travel economy by creating a temporary travel tax credit, allowing businesses to fully deduct food and entertainment expenses, and enacting tax measures to help revitalize U.S. trade shows and exhibitions.

The group is also asking that $10 billion in Economic Development Administration grants be provided to destination marketing organizations and small businesses to promote healthy travel practices and encourage visitation to businesses, attractions and communities where it’s safe travel.

The association would also like to see additional federal funding allocated to COVID-19 testing and laboratory capacity, and an expansion of the federal role in the White House “Testing Blueprint” to help states deploy consistent approaches to contact tracing, data collection and privacy protections.

Lastly, the group is calling on Congress to provide a “limited, temporary and immediate safe harbor for businesses that follow proper health and safety guidelines to protect against COVID-19.”

“This is a top priority for businesses to safely reopen in a way that protects the health of their employees and customers,” the association said.

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